Kazakhstan’s Emerging Economy

Between State and Market

by Roman Vakulchuk (Author)
©2014 Thesis 303 Pages
Series: Emerging Markets Studies, Volume 5


Kazakhstan has become a successful market reformer under the leadership of President Nursultan Nazarbayev. But what type of a market economy has emerged in the country since 1991? This book focuses on Kazakhstan’s transition path, examines the role of the state in steering economic processes, and analyses the state – business interaction. The Varieties of Capitalism approach and a core – periphery analytical framework are applied to classify the evolving model of capitalist economy in the country in detail. The research design is based on a qualitative cross-sectional interview study, where 159 semi-structured interviews were conducted. This study makes an innovative contribution to the scholarly literature on the economic and institutional transition of Kazakhstan.

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the author
  • About the book
  • This eBook can be cited
  • Acknowledgements
  • Abstract
  • Table of Contents
  • List of figures
  • List of tables
  • List of Cases in Point
  • List of acronyms and abbreviations
  • Chapter 1. Introduction: Kazakhstan’s distinct model of economic transition
  • Chapter 2. Kazakhstan’s economy since independence
  • 2.1. Stabilization, economic reform and macroeconomic performance
  • 2.1.1. Economic growth and the structure of the economy
  • 2.1.2. Inflation
  • 2.1.3. Unemployment
  • 2.1.4. Income distribution
  • 2.1.5. Current account balance development
  • 2.1.6. Public and private sector debt
  • 2.1.7. Foreign direct investment and trade
  • 2.1.8. Summary of economic development since independence
  • 2.2. Economic reform measures
  • 2.2.1. Privatization
  • 1) First privatization phase (1991–1993)
  • 2) Second privatization phase (1993–1995)
  • 3) Third privatization phase (1995–1998)
  • 2.2.2. Fiscal policy
  • 2.2.3. Tax policy
  • 2.2.4. Monetary policy
  • 2.2.5. Social policy
  • 2.2.6. Summary of economic reform measures
  • Chapter 3. Institutional framework of the economy
  • 3.1. Assessing institutional reform since 1991
  • 3.2. Varieties of Capitalism (VoC) approach
  • 3.3. Varieties of Capitalism in Kazakhstan
  • 3.3.1. The financial system…..
  • Evolution of the financial system
  • Development of the credit market
  • The capital market
  • Microfinance organizations
  • Islamic banking
  • Summary of the financial system
  • 3.3.2. Corporate governance
  • Development of corporate governance
  • Samruk-Kazyna
  • Problems in the corporate sector
  • Summary of the corporate system
  • 3.3.3. Industrial relations
  • Milestones in industrial relations development
  • The wage-setting process
  • Labour unions and employer associations
  • Summary of industrial relations
  • 3.3.4. The social security system
  • Evolution of the social security system
  • The pension system
  • The insurance sector
  • Summary of the social security system
  • 3.3.5. Vocational education and training
  • Development of vocational education and training
  • Summary of the VET system
  • 3.3.6. Inter-firm relations
  • Evolution of inter-firm relations
  • Summary of inter-firm relations
  • 3.3.7. Summary of the VoC approach
  • Chapter 4. Research design: qualitative cross-sectional interview study
  • 4.1. Cross-sectional research
  • 4.2. Doing fieldwork in Central Asia
  • 4.3. Interviewing elites in Kazakhstan
  • 4.4. Sampling
  • 4.4.1. Sampling procedures: snow-ball sampling and direct contact
  • 4.4.2. Composing the sample
  • 4.4.3. Categories of respondents
  • 4.4.4. Selected industries
  • 4.4.5. Selected countries
  • 4.4.6. Company size
  • 4.4.7. Gender distribution
  • 4.4.8. Interview location
  • 4.5. Methods of data collection
  • 4.5.1. Semi-standardized interviews
  • 4.5.2. Construction of interview guides
  • General approach
  • Interview guides for private domestic, foreign and state-owned companies
  • Interview guide for public officials
  • Interview guides for experts and international organizations
  • Interview guide for employer associations and labour unions
  • 4.5.3. Workshop on interview technique and pilot interviews
  • 4.5.4. Observation and investigator triangulation
  • 4.5.5. Team collaboration
  • 4.6. Field research: data collection
  • 4.6.1. Before the interview
  • 4.6.2. During the interview
  • 4.6.3. After the interview
  • 4.6.4. Recording statistics
  • 4.6.5. Measuring the quality of interviews: grading scale
  • 4.6.6. Dealing with various categories of respondents
  • 4.7. Caveats and limitations in data collection
  • 4.7.1. Methodological problems
  • 4.7.2. Interview ethics
  • 4.7.3. Quality criteria: validity and reliability
  • 4.8. Qualitative data analysis
  • 4.8.1. Preparing the data for analysis
  • 4.8.2. Preliminary analysis of interviews
  • 4.8.3. Methods for data analysis: qualitative content analysis and frequency analysis
  • 4.8.4. Selected interviews for analysis
  • 4.8.5. Constructing the coding frame
  • 4.8.6. Pilot coding
  • Preparatory phase
  • Running the trial coding
  • Evaluation of the coding frame
  • 4.8.7. Main coding
  • Preparatory phase
  • Running the main coding
  • Final round of evaluation
  • Chapter 5. The emerging hybrid market economy: the ‘core–periphery’ model
  • 5.1. Studying state–business interaction
  • 5.1.1. The role of the state in the economy
  • 5.1.2. State involvement over time
  • 5.1.3. Factors for the success of private business
  • 5.1.4. Reasons for differing state treatment of private business
  • 5.1.5. Type of company investment policy
  • 5.1.6. Instruments for solving problems of private business with the state
  • 5.2. Analysing inter-firm relations
  • 5.2.1. Type of interaction
  • 5.2.2. Key factors for interacting with competitors
  • 5.2.3. Regulating competition
  • 5.2.4. Merger and acquisitions
  • 5.2.5. Instruments for solving problems between private companies
  • 5.3. Assessing the influence of other market players (labour unions and employer associations)
  • 5.3.1. Influence of labour unions
  • 5.3.2. Influence of employer associations
  • 5.3.3. Reasons for the weak influence of other market players
  • 5.4. Discussion of results: the essence of the emerging ‘core–periphery’ economy
  • 5.5. Caveats and limitations in data analysis
  • Chapter 6. Conclusions
  • References

List of figures

Figure 1.1.Theoretical approach

Figure 2.1.GDP concentration by industry in 2008

Figure 2.2.GDP development in Kazakhstan

Figure 2.3.Unemployment as percentage of total labour force

Figure 2.4.Gini coefficient, Kazakhstan

Figure 2.5.Gini coefficient, former Soviet Union

Figure 2.6.Current account balance development as percentage of GDP

Figure 2.7.FDI in Kazakhstan as percentage of GDP

Figure 2.8.Dynamics of FDI (USD million)

Figure 2.9.FDI per industries, in millions of USD

Figure 2.10.FDI in Kazakhstan since independence, by country

Figure 3.1.BEEPS data. Enterprise surveys in Kazakhstan (2009)

Figure 4.1.Arranging interviews via direct contact

Figure 4.2.Categories of respondents

Figure 4.3.Sampled industries

Figure 4.4.Distribution between local and foreign respondents

Figure 4.5.Distribution of respondents by country

Figure 4.6.Distribution of interview grades

Figure 5.1.‘Core–periphery’ market-oriented economy in Kazakhstan

← xv | xvi → ← xvi | xvii →

List of tables

Table 2.1.Companies by size of capital (2008)

Table 2.2.Inflation rate (consumer prices), percentage figures

Table 2.3.Main export and import partners of Kazakhstan (2009)

Table 2.4.Revenues from privatization, 1993–1998 (percentage of GDP)

Table 2.5.Summary of economic reform measures in Kazakhstan

Table 3.1.Market economy criteria

Table 3.2.Progress of economic transition

Table 3.3.Key features of the VoC approach

Table 3.4.Major functions performed by the National Bank of Kazakhstan

Table 3.5.Market size of banking organizations

Table 3.6.Structure of the banking sector (June 2011)

Table 3.7.Goals of the Small Entrepreneurship Development Fund ‘DAMU’

Table 3.8.Credits provided by microfinance organizations

Table 3.9.Summary of the financial system

Table 3.10.Major companies owned or part-owned by Samruk-Kazyna

Table 3.11.Major goals of the Samruk-Kazyna Fund

Table 3.12.Obstacles to doing business in Kazakhstan

Table 3.13.Summary of the corporate system

Table 3.14.Key features of the labour market (1991–2008)

Table 3.15.Summary of industrial relations

Table 3.16.Social protection expenditure, percentage of GDP (2008)

Table 3.17.Summary of the social security system

Table 3.18.Problems with VET

Table 3.19.Summary of VET

Table 3.20.Summary of inter-firm relations

Table 3.21.The VoC approach in Kazakhstan

Table 4.1.Sample

Table 4.2.Seven questions

Table 4.3.Pilot coding sheet ← xvii | xviii →

Frequency Table 5.1.Assessment of the role of the state

Table 5.2.Kazakhstan’s development model

Table 5.3.Perception of the role of state, by company representatives

Frequency Table 5.4.State involvement in the economy over time

Frequency Table 5.5.Summary of state involvement over time

Frequency Table 5.6.Success strategy for private business

Table 5.7.Perception of communication by companies

Table 5.8.Communication channels by business size

Frequency Table 5.9.State attitudes to private business

Table 5.10.Size of business as a reason for differential treatment

Table 5.11.Company ownership as a reason for differential treatment

Table 5.12.Strategic considerations as a reason for differential treatment

Table 5.13.Merging of state interests with business interests

Frequency Table 5.14.Investment strategies of private companies

Table 5.15.Investment strategy by company size

Frequency Table 5.16.Instruments for problem resolution

Table 5.17.Respondents’ perceptions of problem-solving instruments

Frequency table 5.18.Interaction between private firms

Table 5.19.Inter-firm relations by industry

Frequency Table 5.20.The nature of competitor relations

Table 5.21.Factors behind interaction between competitors

Table 5.22.Examples of disclosure of information among firms

Frequency Table 5.23.Degree of state regulation of competition

Table 5.24.Perceptions of competition regulation, by industry

Frequency Table 5.25.Frequency of M&As

Table 5.26.M&As by industry

Frequency Table 5.27.Instruments for problem resolution

Table 5.28.Tools for solving problems

Frequency Table 5.29.Perceived role of labour unions

Table 5.30.Perceptions on the influence of labour unions

Frequency Table 5.31.Perceived role of employer associations

Table 5.32.Perceptions on the influence of employer associations ← xviii | xix →

Frequency Table 5.33.Weak influence of other market players

Table 5.34.Reasons for the weak influence of other market players

Table 5.35.Other reasons for weak influence

Table 5.36.The emerging market-oriented economy in Kazakhstan

← xix | xx → ← xx | xxi →

List of Cases in Point

Case in Point 4.1.Snowball sampling in practice

Case in Point 4.2.Importance of ‘symbolic power’

Case in Point 4.3.‘Recipe’ for arranging interviews with public officials

Case in Point 5.1.Entrepreneurs’ attitudes toward the first market reforms

Case in Point 5.2.The effective association of bankers

Case in Point 5.3.Influence of foreign companies’ business culture

← xxi | xxii → ← xxii | xxiii →

List of acronyms and abbreviations


ISBN (Hardcover)
Publication date
2014 (November)
Marktwirtschaft wirtschaftlicher Wandel institutioneller Wandel Staatskapitalismus
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2014. XXIV, 303 pp., 65 tables, 19 graphs

Biographical notes

Roman Vakulchuk (Author)

Roman Vakulchuk is a Senior Research Fellow at the Norwegian Institute of International Affairs (NUPI). He holds a PhD in Economics from Jacobs University Bremen (Germany). His main specialization is Central Asia and he has been principal investigator of various economic research projects devoted to the region.


Title: Kazakhstan’s Emerging Economy